I propose to take Questions Nos. 137 and 138 together.
My Department allocates recurrent funding to the Higher Education Authority (HEA) for direct disbursement to the HEA designated higher education institutions, including Institutes of Technology (IoTs) such as Galway Mayo Institute of Technology. The HEA allocates this funding to the institutions and the internal disbursement of funding is then a matter for the individual institution.
The HEA has been closely monitoring the financial position of all of the IoTs and in particular are working closely with those Institutes, such as GMIT, that are experiencing financial difficulties in order to ensure appropriate mechanisms are put in place to eliminate any deficit as quickly as possible.
The HEA has a policy framework in place for engaging with vulnerable IoTs which requires Institutes to submit a three year plan to return them to a balanced budget situation. If the Institute is unable to demonstrate how a return to a balanced budget can be achieved within this timeframe, or if actual performance deviates significantly from the plan, then the HEA will seek the appointment of an independent financial expert to work with the Governing Body and Executive Management Team to agree a revised plan and programme of remedial action. The first of what is expected to be a series of meetings is scheduled for this week between the GMIT executive and the HEA to discuss a number of issues relating to the financial position of the Institute including those which are specific to the Castlebar campus.
My Department and the HEA are aware of the financial difficulties being experienced by a number of the IoTs. The Financial Review of the Institutes, recently undertaken by the HEA in order to provide an overview of the financial health of the IoT sector, to consider capacity issues and to examine the challenges for the institutions given their respective plans for the future, makes a number of recommendations on how some of the issues which contribute to funding problems in the IoT sector can be addressed. These policy recommendations will feed into the work being undertaken on developing a sustainable funding model for the sector.
Funding overall for the higher education sector is a key concern for me particularly in light of the additional pressure that will fall on the system over the next decade or so. In seeking to address the issue in the short term, I have for the first time in nine years secured as part of Budget 2017, additional funding for the sector. In 2017 additional funding of €36.5m will be made available with €160m additional over the next three years.
The Report of the Expert Group on Future Funding for Higher Education, published in July, clearly outlines the funding challenges and offers a number of approaches and recommendations for consideration for the medium term. As committed to in the Programme for Government, the report has been referred to the Oireachtas Education Committee and this consultation will form part of the process of formulating a plan for the future of the sector.
In addition, in Budget 2017 the Minister for Public Expenditure and Reform and I, announced a policy review with the aim of designing and implementing a sustainable and predictable multi-annual funding model for higher and further education and training involving increased Employer and Exchequer contributions from 2018. The review will be undertaken as part of the overall response to meeting the anticipated skills needs in the economy over the coming years, in line with the policy framework set out in the National Skills Strategy.
It will include an analysis of the business case for enhanced investment in the higher and further education and training sectors. In this context it will identify key elements of the new funding model and of the expected impacts including those on employers. The review will include consultation with stakeholders. The policy review will be published by the end of April 2017, and will complement the ongoing work by the Oireachtas Committee in relation to the Cassells report.
